News AQRS
announced that it had secured an award from JKR worth RM141m for the upgrading
of roads in Negeri Sembilan.
Comments Management guided that the company had already
started work on the project, which is expected to be completed by end-2014.
The contract worth of
RM141m was within our FY12E order book assumption of RM300m.
Outlook The
outstanding order book currently stands at c. RM900m, which will provide
earnings visibility for the group for the next two years.
We expect more
contract flows to come in as the group is bidding for the sub-contracts the
KVMRT project worth about RM300m to RM500m in the near term.
The earnings
catalysts will be AQRS securing more contracts worth more than RM300m in FY12.
Forecast No
changes to our FY12E and FY13E earnings forecasts.
Rating NOT RATED
We have a NOT RATED rating on the stock as we have
yet initiate coverage. However, there is
an attractive upside of 18% to our Target Price of RM1.39.
Valuation We
value AQRS at RM1.39 based on an unchanged 7.0x PER on its FY13 EPS of 19.9
sen.
Risks Delays
in construction projects.
Price escalation in raw materials and labour costs.
Source: Kenanga
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